This Paris Life

Expert Insight, Breaking News, and Insider Stories on Real Estate in Paris

Real Estate Market Faces a Sluggish First Half in 2023.

The real estate market in France experienced a rare setback in the first half of 2023, marking the first negative performance since 2015. Nationwide, prices declined by -0.4%, raising concerns among industry experts and investors. This downturn was especially surprising given that the first half of the year usually witnesses a surge in activity during the traditional spring season.

The major metropolitan areas faced varied trajectories during the second quarter, with some cities showing slight improvements while others struggled. Strasbourg emerged as a leader with a significant increase of +0.8% in June, followed closely by Marseille (+0.7%) and Montpellier (+0.6%). On the other hand, cities like Bordeaux and Lyon experienced notable declines of -1% and -0.4%, respectively, adding to their long-term struggles with real estate purchasing power issues.

One of the key drivers behind the overall market decline was the drop in house prices, falling by -0.7% since January, while apartment prices remained stable (+0%). This trend might be attributed to potential buyers seeking larger loans for houses, leading to more stringent financing criteria from banks. It appears that the post-COVID trends that previously drove house prices upward have been overshadowed by credit constraints.


The lackluster performance in the second quarter was particularly evident in Paris, where prices stagnated rather than experienced a rebound as seen in previous years. Consequently, the capital narrowly escaped falling below €10,000 per square meter. This year’s -0.5% decline starkly contrasts with the mild positive growth observed during the springs of 2021 and 2022.

Looking forward, the real estate market is likely to continue facing challenges in the coming months. The third quarter, usually the least active of the year, may mirror the sluggish start of 2023. With no encouraging signs for the market’s recovery, analysts predict a continued decline in prices and a low volume of transactions. The lack of positive elements in the market leaves little hope for an upturn in the second half of the year.

The decrease in loan production adds to the gloomy outlook for the real estate market, with 2023 witnessing a staggering 40% drop compared to the previous year. The trend shows no signs of reversing, and banks’ reluctance to utilize their 20% flexibility margin further dampens optimism. With interest rates on the rise and the European Central Bank planning further rate increases, prospective borrowers face higher costs and uncertainty, leading many to delay their purchase plans.

For the market to recover, stability in interest rates and the credit environment is crucial. However, with interest rates projected to reach 4.5% for a 20-year loan by the end of the year, prices would need to fall by a significant 35% in a year to compensate—an outcome unlikely to materialize. Therefore, it seems the market will continue to face headwinds and a slow trajectory in the foreseeable future.



Contact Paris Property Group to learn more about buying or selling property in Paris.

Find us on
Get the PPG Monthly newsletter

Contact us
By phone
In France +33 (0)9 75 18 18 99
From the US (917) 779-9950
By email
Stay current on the Paris real estate market:
Sign up for our newsletter
Thank you and welcome aboard!
* Required fileds